A frequently employed marketing technique involves the use of redemption coupons wherein a consumer presents a coupon to a salesperson or cashier at a store and obtains a reduced price for a particular purchased item. Studies show that of the 34 billion coupons that were distributed during a recent year, only 5% were redeemed. The low redemption rate apparently occurs because of the inconvenient method of distribution, usually in periodical publications or by mail, poor timing of distribution, distribution to the perspective purchaser when he is not in close proximity to a point of purchase, or the failure of the consumer to notice and clip the coupon.
A further problem with the prior art distribution system of coupons is that it is subject to abuse by unscrupulous store owners and management personnel, as well as consumers. In many areas, great numbers of a periodical publication containing coupons are collected, coupons are clipped, and these coupons can be redeemed without the purchasing of the particular item for which the coupon was originally distributed, resulting in cash flow to owners, management personnel, and consumers, even though no product is purchased. The cost of these unscrupulous practices is absorbed in the advertising budgets of suppliers and manufacturers of products being promoted through the coupon redemption program.
A further disadvantage of the prior art method of distributing coupons is that manufacturers must pay a substantial cost for advertising space in periodicals or in mailings. The prior art coupon distribution method has a further disadvantage of usually not being correlated with retail buyers, merchandisers, store managers and supervisors so that there is frequently a high probability of a retailer having its supply of a particular product exhausted as a result of a coupon appearing in a newspaper or magazine. A further disadvantage of the prior art couponing distribution methods is that the coupon frequently has very little impact on the decision of the consumer to buy a particular product, because of the long time interval between the time the coupon is seen and cut out, and the purchase time. It is the practice of many consumers to buy a product and then determine if they have a coupon for the product, rather than buying the product because they have a coupon.